5 Ways To Best Tap Into Your Accounts

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5 WAYS TO BEST TAP INTO YOUR ACCOUNTS BY BRADY SPEERS

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Brady Speers, retirement and financial enthusiast, gives strong advice and information on the 5 best ways to tap into ones accounts before retiring. Brady Speers, who runs his own retirement planning radio show in Mansfield, Texas outlines the best ways to prepare for retirement. Please view this presentation as well as others located on Brady Speers profile for relevant retirement planning advice. Check back soon for more updates!

Transcript of 5 Ways To Best Tap Into Your Accounts

Page 1: 5 Ways To Best Tap Into Your Accounts

5 WAYS TO BEST TAP INTO YOUR ACCOUNTSBY BRADY SPEERS

Page 2: 5 Ways To Best Tap Into Your Accounts

Delay Claiming Social Security For As Long As You Can

• If you delay claiming Social Security from 62—the earliest age at which you can claim—until 70, you will increase your maximum monthly benefit by 76 percent

• You could do this by choosing to work or working part-time. However if you retire, you'll have to begin drawing on your retirement accounts or other assets to pay for your living expenses

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USE YOUR MONEY FROM TAXABLE ACCOUNTS FIRST

• It is advantageous to extend the tax-free compounding that happens in your retirement accounts as long as possible

• If you've retired lucky enough to have assets outside your retirement plans, take those down to zero

• You need to have a liquid cash reserve of three to six months of income for emergencies. The gains on the investments held in your taxable accounts will be taxed at the long-term capital gains tax rate, which varies depending on your personal income level. For almost everyone, the tax on net capital gains is 15 percent

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AT AGE 70, BEGIN TAKING YOUR REQUIRED MINIMUM DISTRIBUTIONS

• By law, you must start drawing on your retirement accounts, at minimum amounts dictated by the IRS

• The minimum amounts are set by a calculation: The account balance at the end of the preceding calendar year divided by the distribution period from the IRS's "Uniform Lifetime Table." If the minimum distribution on a $500,000 IRA at age 70 would be a slightly over $18,000. Remember, all of your distributions from tax-free accounts will be taxed at your income-tax level

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LEAVE ROTHS UNTIL THE END

• If the minimum distributions meet your income needs and you still have some money remaining in Roths, it's in your best interest to leave it there

• You can also leave any IRA to the next generation (an heir); if you do, it becomes an inherited IRA and falls under the tax and distribution rules for that kind of account

• If the IRA was a Roth IRA, your children or other heirs won't have to pay income taxes on the withdrawals

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CONSIDER YOUR MARRIAGE STATUS

• If you are married, it's probably to your advantageous in terms of taxes to negotiate your draw-down strategy together and draw from plans in both names.

• Don't forget to consider the increasingly likely possibility of divorce in the older years. If you draw down one spouse's assets first, it might make splitting up your retirement accounts more difficult, if there is a divorce or separation.

• Retirement requires a change in how you view and manage your money, as you go from accumulating assets to preserving them. Your viewpoint regarding your marriage may change as well